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Covid-19 Pandemic Hits Businesses and Increases Unemployment

As the novel coronavirus continues to spread rapidly around the world, many businesses have asked employees to work from home, while others were forced to halt operations, at least temporarily. Employees working in fields that require human interaction have been some of those most affected, either by losing their jobs or receiving a significant pay cut.

“I’m no longer working shifts at the university library, so my income, although minimal, has been completely cut off,” Yasmine Naccache, 20, said in text messages. “I’m used to being financially independent, but now I have to go back to relying on my parents for money.”

For young individuals and students, the coronavirus has become a barrier against their aim to make money for themselves and achieve somewhat of a financial independence.

“Just before the whole Covid-19 outbreak, [a couple of people and I] were lifting our own feet off the ground with freelance work and a few original productions for the coming year,” Ali Amin, 18, said in text messages, “but all our plans and clients have been squashed. We invested our own personal money in our future services, but now our target profits for this year got vastly effected— if not completely vanished.”

In some households, income is generated by various members of the family and this makes it easier when one deals with a financial cut. 

“My sister lost her job and my other sister had 25% of her salary cut down,” Shahd Ali, 21, said in text messages. “We all pitch in to keep the household running so it’s a bit of a tight situation right now.”

“All [my family] does is eat, so the shopping trips that used to cost around 600 dirhams a week, are now 1,300 dirhams,” Hanan Kayali, 19, said in text messages. Since both her parents are working from home, their household consumption of electronic devices for work and education — for her siblings — has increased. ”The electricity bill is now triple what we used to pay,” she said.

A report published by the International Labor Organization estimated that a “low” of 5.3 million and a “high” of 24.7 million people are expected to lose their jobs globally because of the virus. In comparison to the global financial crisis of 2008, COVID-19 seems to have an effect on larger groups of people.

In the United Stated, millions of people started to file for unemployment as a result of the virus. In the only first week of April, there have been an additional 6.6 million jobless claims, resulting in almost 17 million in total according to the U.S Department of Labor.

 “We lost around 2.5-3 million dirhams just in one month,” Bruno Britto, managing director at Max Events Dubai, said in a phone interview. As people were restricted from crowded areas and gatherings, event-related businesses have received a hit as people rushed to cancel their previously scheduled events. Companies had to be creative in organizing online events instead. “We have come up with a free-entry Stay at Home Singing Contest and it’s open to all U.A.E. residents,” he said. “We are giving cash prizes to winners but the next contest will be paid-entry.”

Mustapha El Fakir, Senior Projects Manager at Nakheel, said that in the construction industry, “it all depends on who our client is. Some of our projects were terminated while others were either suspended or postponed.”

Construction businesses also received a shock when areas crowded with construction workers were put under lockdown. This rose as a challenge for the companies that heavily depend on these workers to keep the projects moving.

“[The workers] now have to obtain permits from the government detailing where they are going and their routes to their work are agreed upon,” said El Fakir. “This resulted in the reduction of the number of workers but an increase in transportation fees since buses are not allowed to carry a crowded number and it should follow precautions that involve social distancing.”

There has not been a report released about the number of layoffs in the U.A.E., but the government launched a new initiative titled the Visual Labour Market on April 12 that aims to provide opportunities for job seekers and to combat unemployment. The government has also announced a visa extension for all of its residents till the end of 2020. Individuals who had previously one month to find a new job before their visa expires now have more time to get a new opportunity without the risk of flying back home. 

Edited by: Raseel Amro

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